City staff is recommending to council on Monday to throw in $505,000 in order to match dollars on NOHFC funding of $1 million to help with the cost of running and maintaining the YMCA on McNabb Street.
The immediate financial implications are the contribution of $505,000 of funding to the YMCA to match NOHFC funding and enable capital repairs to the current facility. Tom Vair, City CAO submits in his ask of council.
On Tuesday, the City announced that an agreement was reached when a charitable organization – who do not want to be identified, offered to buy the building in order for the YMCA to continue operations past the May 15th deadline.
The Organization is purchasing the building as a community investment, not a real estate investment. While the agreement continues to be conditional on significant due diligence being undertaken, some key points in the agreement are that the purchase of the building will be for $2m with lease payments of 5% per year ($100,000) paid by the YMCA of Sault Ste. Marie and backstopped by the City for the term of the lease, which remains to be negotiated in full. As indicated above, this represents a significant decrease from the mortgage payments previously paid by the YMCA.
The City will be responsible for the lease payments of the YMCA for a ten year period. While the financial risks cannot be fully estimated over the ten-year lease agreement due to the variable nature of memberships and the capital costs of the facility, it is anticipated that the YMCA will be able to provide these lease payments to the City but there is financial risk of approximately $1M over the ten year lease term to the City in the event the YMCA cannot make any of these payments.
Any repairs made to the building will be made to minimize investment and examine opportunities
to relocate equipment to a new facility in the future (should a new facility prove feasible)
The $505,000 will come from the contingency reserve to support capital refurbishments at the YMCA and maximize an NOHFC funding agreement; and determine a path forward to enable the YMCA building to continue to be exempt from municipal taxation if such exemption is lost as a result of this transaction.
The Sault Ste. Marie YMCA was slated to close May 15th due to financial pressures and an aging facility.
On Tuesday, the City announced that an agreement was reached when a charitable organization – who do not want to be identified, offered to buy the building in order for the YMCA to continue operations past the May 15th deadline.
Council is expected to approve the request.
Vair must be getting a kickback some sort , more city hall collusion
The City should not be entering the real estate business with taxpayer money.
I don’t think my taxes should pay for someone else’s poor management of a business. we should at least have a vote on it.
I am suspicious of the secretive nature of this whole agreement. Whatever this charitable organization is that does not want to be named, but which is after huge taxpayer support/guarantees is totally unacceptable to me. There are many shady organizations that call themselves charities. Step out into the open and identify yourself to the public if you’re seeking these guarantees and funding. Mr Vair, why are you not representing the public interest? The logical conclusion is that some personal gain is at play.
Such a quick decision, another closed door meeting. Why all the secrecy? “The charitable organization – who do not want to be identified” – smells fishy.
Another out-of-town developer?
Am I missing something? The city and NOHFC are kicking in $1.5 million and guaranteeing $1 million more in lease payments over the next ten years and the charitable organization buys and owns the Y for $2 million? Sounds like a pretty sharp charitable organization or one that is well connected.